Nifty Levels and Trading Strategy for 26 Sep 2019 Expiry

| September 25, 2019 | 2 Comments

Nifty opened lower at 11564, declined further after opening and traded with negative bias for rest of the day. Nifty declined by more than 170 points to register day’s low 11416 before closing 148 points down at 11440.

Yesterday, 11608 11608-11641 was immediate resistance and Nifty was expected to decline further towards 11480-11443.

Nifty opened lower and declined straightway below 11480 to achieve minimum target. Later 11503-11528 was updates as fresh resistance after registering low 11464 which worked perfect, Nifty entered in resistance and decline till 11416 after the update. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [5] on daily chart in my last “All Time Frames” Report. There is no major change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave [iii] of [5] is completed at 11171 and [iv] may be completed at Irregular Correction at 10004 and wave [v] may be in progress. Wave [v] achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave [v] achieved 12103 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave [v] of [5] on daily chart.  Again, there is no major change in wave counts on this chart.

The bounce from 10004-12103 is confirmed as (abc) because of overlapping of waves after break below 10985. Earlier we had 02 possibilities for this setup but possibility of Irregular Correction is almost negated because of this big bounce. Now, Ending Diagonal Triangle is most probable pattern for this setup.

Now, the (abc) bounce from 10004-12103 is inner wave (1) of Ending Diagonal Triangle for wave [v]. If this is the case then Nifty can decline towards 10585 to complete wave (2) of ED and later Nifty can bounce slowly with volatility for new high to complete wave (3), (4) and (5) of ED.

Nifty declined almost till 10585 (registered low 11637) and bounced back, so may be wave (2) of ED is already completed at 10637 and wave (3) of ED is started. If wave (3) is started then it will have (abc) pattern, so bounce towards new high will have many volatile up and down moves.

Moreover, if it really ED started from 10004 then next 1-2 years are going to be tough for analysts and traders. Many TA indicators fails to deliver results during Ending Diagonal and this ED will be very big.

But Nifty left a Question Mark at the bottom before this big bounce and same I am going to explain on hourly chart.

So, let have a separate look at move after 10782 on Hourly Time Frame chart.

This is hourly time bar chart of Nifty covering move after 10782 which I marked as start of wave (iv) on daily chart.

The bounce from 10782-11181 is Simple Zigzag (abc) move, thus meeting the requirement of wave (iv). But if we assume wave (iv) completed at 11181 then wave (v) from 11181-10670 doesn’t look like Impulse or Ending Diagonal Triangle. This condition will be a question mark for time being.

But no matter if this last down leg from 11181-11637 is Impulse or Corrective, we can calculate next moves based on the pattern of bounce after 10637 only. So, let’s ignore earlier move for time being and concentrate on the pattern of bounce after 10637.

After 10637, it seems wave [a or 1] completed from 10637-11141, wave [b or 2] completed from 11141-10670 and wave [c or 3] may be either completed from 10670-11694 or still in progress.

23%-38% retracement of wave (c or 3) is placed at 11452-11302. So, 11452-11302 is major support and Nifty already entered in Major Support. Now, 11302 is immediate downside breakeven point and Nifty if breaks and stay below 11302 can result in further decline towards 10670-10637. Otherwise one more bounce of 400-600 points can be there if Nifty manages to stay above 11302.

Now let’s analyze the decline after 11694 to check its pattern.

This is 5 minute time bar chart of Nifty covering decline after 11694 which I am analysing independently. I am taking alternate counts here because last wave on hourly chart had alternate counts.

It seems wave (a or 1) completed from 11694-11539, wave (b or 2) completed from 11539-11635 and wave (c or 3) may be completed at 11416 or still in progress. Wave (c or 3) projected more than 123%.

23%-38% retracement of progress of wave (C or 3) is placed at 11467-11499. So, 11467-11499 is immediate resistance and 11499 is immediate upside breakeven point. Nifty if breaks and stay above 11499 for 15 minutes can result in further bounce towards 11635-11694, otherwise we can expect one more decline of 107-172 points.

Conclusion

For Long Term, there is possibility of Ending Diagonal (ED) Triangle pattern for the move after 11004. If it is really going to be ED then next 1-2 years are going to be tough for Analysts and traders because many TA indicators fails to give desired results during ED. And this ED will be big because its inner waves (1) itself is of 2000 points. Nifty can rise with many volatile and unexpected up/down swing if it is going to be Ending Diagonal Triangle as I explained on Daily Chart.

Levels wise, Nifty can either bounce towards new life high or can fall below 10637 again and 11302 is breakeven point between these 02 possibilities. Nifty is in positive zone as long as trading above 11302 whereas breaking below 11302 will turn major trend as negative again. 11452-11302 is major support now and Nifty already entered in major support.

For very short term/Intraday, 11467-11499 is immediate resistance and 11499 is immediate upside breakeven point. Nifty if breaks and stay above 11499 for 15 minutes can result in further bounce towards 11635-11694. Otherwise we can expect one more decline of 107-172 points if Nifty completed an upside corrective pattern below 11499.

We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

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We have following trading conditions according to outlook and levels: –

Confident Trade: Nifty if breaks and stay above 11499 for more than 15 minutes then buying can be done on decline in 11499-11467 range using exact stoploss of 11463 expecting bounce towards 11635-11694 which can extend even higher.

Trade needs confirmation during Market Hours: Low risk selling can be done on bounce in 11467-11499 range using exact stoploss of 11507 (some points above 11499) expecting decline of 107-172 points from tomorrow’s high. This trade needs confirmation during Market Hours, a corrective pattern must complete in 11467-11499 range for confident selling.

We need conformation because Nifty already entered in major support 11452-11302 and the decline from top is 3 waves till now. If this is Corrective Simple Zigzag pattern then Nifty can bounce for high above 11694 after completion of correction.

Further, I will update about the formation of any important internal pattern or any change in trend/pattern/important levels or fresh support/resistance/breakeven point during market hours by WhatsApp Broadcast to all my “Nifty Live Updates” subscribers.

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Category: Nifty

About the Author ()

Deepak Kumar is an independent Technical Analyst, regular practitioner and Trainer of Elliott wave theory applying Elliott's Wave Principles on Indian Markets successfully since 2011 and made many accurate predictions. He is also the author of book "Practical Application of Elliott's Wave Principles by Deepak Kumar"

Comments (2)

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  1. Sanjay says:

    Sir please write an article on todays nifty’s progress

  2. Dina Nath Singh Yadav says:

    Very good analysis of nifty on EW parlance I like very much your help for traders
    Thank you sir.

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